The effects of 9/11/2001 on business strategy variability in the US air carrier industry

Abstract

PurposeThis paper aims to examine the effects of 9/11/2001 on strategic variability in the US air carrier industry. The paper also seeks to examine the role of firm size in these relationships.Design/methodology/approachThe paper tests two different perspectives on organizational adaptation to environmental jolts: the punctuated equilibrium model and institutional isomorphism. The two counter hypotheses predict either increasing or decreasing variability in strategic response to 9/11, respectively. This is a longitudinal study of the US air carrier industry. The sample includes the major, national, and large regional air carriers in the US from 1979 (post‐deregulation) to 2008. The data come from archival sources. The study includes measures of variability in differentiation and low cost strategies as well as scope.FindingsTime series regressions examine the effects of the 9/11 jolt on business strategy variability in the majors, nationals, and large regionals. The results lend some support to both perspectives on organizational adaptation. Air carrier size had a significant relationship to strategic variability.Originality/valueThe paper studies the behavior of firms in the US air carrier industry following the terrorist attacks of 9/11/2001. It examines two different theoretical approaches to environmental jolts and should provide useful information to both academics and managers who are interested in the effects of significant environmental changes on the behavior of an industry.